12 vessels worth 8.5 billion yuan! Nanjing Jinling receives another large order from a returning customer

The booming market for car carriers is attracting more and more foreign shipowners to order new vessels from Chinese shipyards. Italian shipping giant Grimaldi has decided to place another order for two 7,800-meter lane cargo ro-ro vessels at Nanjing Jinling at a "high price," and will also order 10 more car carriers from a shipyard under the CSSC group, with a total value of US$1.2 billion (approximately RMB 8.539 billion).

Recently, Emanuele Grimaldi, CEO of Grimaldi, revealed that an additional contract for two GG5G series ro-ro vessels has been signed with Nanjing Jinling, bringing the total number of vessels in the project to 14. The latest two vessels cost approximately US$100 million each, about 30% higher than the US$66 million per vessel for the first 12 vessels ordered in 2018.

It is understood that this type of vessel adopts the Grimaldi Green 5th Generation (GG5G) design, jointly developed by Grimaldi's technology and energy-saving department and Knud E. Hansen. The new vessels will be hybrid-powered, equipped with large lithium batteries that can generate 100% of the onboard electricity while in port. The lithium batteries will be recharged while the vessel is sailing, using shaft-driven generators and 600 square meters of solar panels.

The GG5G series ro-ro vessels have an overall length of 238 meters, a molded breadth of 34 meters, a speed of 20.8 knots, and can transport over 7,800 lane meters of ro-ro cargo, approximately 500 trailers. They are the world's most advanced new generation of environmentally friendly short-sea cargo ro-ro vessels, with a number of innovative energy-saving and environmentally friendly devices, featuring energy efficiency, environmental protection, and flexible and efficient cargo handling.

In 2018, Grimaldi signed a contract with Nanjing Jinling for the construction of 12 GG5G design ro-ro vessels. At that time, the 7,800-lane-meter ro-ro vessel was the world's largest cargo ro-ro vessel, and this order, with a total value exceeding US$800 million, was also one of the largest ro-ro vessel orders ever received by a Chinese shipyard.

According to International Ship Network, as of now, Nanjing Jinling has delivered the first eight ro-ro vessels of this series, and the ninth vessel, "Eco Italia," is expected to be delivered at the end of October. These nine vessels are all operated by Grimaldi in the Mediterranean. The other three are operated by Grimaldi's subsidiary Finnlines, delivered in the first half of this year, and deployed on the Baltic and Northern European routes. They are 1A ice-class and specially designed for heavy lifting, with one less upper deck, and a capacity of 5,800 lane meters.

In addition to the additional order of two ro-ro vessels, Grimaldi also confirmed that it will sign a contract for the construction of 10 car carriers with a shipyard under CSSC by the end of this month, valued at US$1 billion, with the new vessels expected to be delivered after 2025.

Previously, there were reports that Grimaldi planned to order 10 9,000-car-capacity ammonia-ready car carriers from Nanjing Jinling, with a contract value of US$1 billion. If the news is true, this would be the second large-scale ammonia-ready car carrier order globally after the order of eight 9,100-car-capacity ammonia-ready car carriers by LR Shipping and CSSC Heavy Industry (Jiangsu) in the first half of this year.

Clarkson's data shows that Nanjing Jinling currently has 12 car carrier orders on hand, ranking first in this vessel type along with CIMC Raffles. If the 10 vessels to be ordered by Grimaldi are added, Nanjing Jinling's car carrier order backlog will increase to 22 vessels, far exceeding other shipyards.

According to Clarkson's data, Chinese shipyards have received a total of 64 car carrier orders since last year, far exceeding Japanese shipyards (13 vessels) and South Korean shipyards (2 vessels). As of now, the global car carrier order backlog totals 82 vessels, with 65 from Chinese shipyards, 15 from Japanese shipyards, and 2 from South Korean shipyards.

The car transportation industry has been sluggish for many years. Since 2022, car carrier freight rates have soared. In mid-May this year, the daily charter rate for car carriers reached US$55,000; in mid-August, the freight rate for the 6,178 CEU car carrier "Lake Geneva" has risen to US$100,000 per day, a nearly fivefold increase compared to December 2019.

Reports indicate that the daily charter rate for new Panamax car carriers is about to reach US$120,000, and is expected to further increase by 20%, exciting many ship suppliers and investors. Recently, VesselsValue analysis indicates that car carrier freight rates will continue to grow in the second half of this year and will reach US$150,000 per day in 2023.

VesselsValue Ro-Ro market head Dan Nash said that the ability of car carriers to maintain high levels in the current bull market is mainly due to insufficient newbuilding investment over the years, resulting in a shortage of car carrier supply. "In the foreseeable future, further growth for another 12 months is almost guaranteed," VesselsValue Ro-Ro market head Dan Nash predicted.